Market Report: The City seizes on hopes of a new AstraZeneca bid by Pfizer

Hopes of a fresh takeover bid for AstraZeneca from Pfizer were stoked today amid reports that talks between the two have resumed.

After Pfizer’s £69 billion bid was rebuffed in May, takeover rules required the US giant to enter a three-month “cool off” period during which it could not make another approach.

That period ended on Monday, with Pfizer now able to table just one knock-out offer to tempt Astra, or else wait until November if it wants to reopen full negotiations.

Speculators hoping that an offer is just around the corner pounced on reports in Swedish business daily Dagens Industri today that discussions between the two have restarted behind closed doors.

AstraZeneca climbed 142p to 4621.25p and has now risen 4.72% since last week.

The Footsie managed to shrug off a dour performance from the supermarkets to add 15.09 points to 6820.89.

Afren had more bad news for investors today as it cut full-year production forecasts by 20%, blaming the suspension of activity in war-torn Iraqi Kurdistan.

Last month the mid-cap oil and gas explorer, which has operations in West Africa and the Middle East, was forced to suspend its chief executive and chief operating officer after “unauthorised payments” were discovered that may have been to their benefit. The probe into the payments engulfed two more executives yesterday, with both suspended. Afren slipped 7.8p to 91.62p.

Material- testing specialist Exova became the latest company to be hit by the surging pound as it revealed a 2.7% slide in revenue during the first half. The company slipped 22.4p to 190.3p.

Shares in the insurance consolidator Chesnara rose 8.5p to 332.75p after the company increased its pre-tax profits 26% to £27.4 million during the first half of the year.

Entertainment One, the film and TV distributor behind the likes of Peppa Pig, pictured, today snapped up Canadian group Force Four Production. Entertainment One added 2.1p to 341.95p.

A bullish trading statement from Stobart Group helped it add 5.25p to 122.75p.

Zoo Digital tumbled 1.12p to 8.12p on AIM after revealing losses spiralled to $2.7 million (£1.6 million) in the first half. The company, which makes software for subtitling and dubbing video, also admitted revenue fell from $10.3 million a year ago to $9.5 million.